East India Company Model
That Rohatyn Promotes
In his book Corporate Warriors, Peter W. Singer lauded the English East India Company as the model for today's Private Military Companies ("PMCs"). In his account of the history of early efforts at privatization of military functions in an empire, Singer noted, "Private businesses also began to take on military roles outside of government through the chartered company system. In this arrangement, joint-stock companies were licensed to have monopoly power within a designated area, typically lands newly discovered by the Europeans.... The two most noted of such ventures were the Dutch East India Company and the English East India Company....
"While nominally under the control of their license back home, abroad, the charter ventures quickly became forces unto themselves. They not only dominated the business networks (monopolizing the trade in spices such as nutmeg, cloves, cinnamon and pepper, tea, and later silk, Chinese porcelain, gold and opium), but also acted to insure their own military protection.
"Thus it was not uncommon for private charter companies to take on the trappings of a state. They became quite curious institutions, where all the analytical distinctions between economics and politics, state and nonstate domains, property rights and sovereign powers, and the public and private broke down.... Such firms not only posted huge profits by controlling the trade between East and West, but also controlled armed forces and territories that dwarfed those of their home states. The English East India Company hired a mix of British, German, and Swiss mercenaries, as well as local Sepoy units. By 1782, the company's army was over 100,000 men, much larger than the British Army at the time."—Jeffrey Steinberg
